Snakes and Ladders

I joined Nexus in May of this year as a portfolio manager. I am part of the group that is responsible for selecting companies for investment and constructing portfolios. It is a role that carries great responsibility, and I am honoured to have the opportunity to earn your trust.

I have been in the investment industry for over 20 years. Most recently, I was a portfolio manager at a large Canadian mutual fund company. Before that, I was an equity research analyst with a large Canadian bank. I am old enough to have witnessed multiple market cycles and young enough to have learned lessons from each. At my core, I am an investor. I am obsessive about the research process and use that to sate my intellectual curiosity. This diligence is personally satisfying but is also aligned with Nexus’s rigorous and disciplined investment process. Similarly, I believe the style in which we invest at Nexus is the best way to achieve strong risk-adjusted returns over the long term.

Now on to family game night. The calendar has flipped to July, school is out, and the days are hotter – summer has officially arrived. The pace of life tends to slow, conversations tend to linger, and family time tends to increase. One of my favourite ways to spend quality time is game night. Sometimes it’s just my immediate family and sometimes it expands to 16 at our annual summer reunion. Regardless of how many players, it’s always a good time. Also welcome is the lack of electronic devices.

The games range from strategy tests like chess, to modern simplicity like Exploding Kittens, or going back a few years even, Snakes & Ladders. I like this last one because it reminds me of how others behave in the stock market. In Snakes & Ladders, you’re at the mercy of the roll of a die. Sometimes you land on a ladder and climb ahead while other times you land on a snake and slide backwards. Unless you have a special skill to manipulate the roll of the die, your success or failure is left to chance. At Nexus, we prefer to tilt the odds in our favour.

Fortunately, in the stock market, you do have an opportunity to affect your fate. With proper due diligence, a consistent investing philosophy, and a long-term view, we believe you can gain an advantage. This is active fundamental investing. It’s like being able to influence the number of the die and ultimately choose a path with fewer snakes and more ladders. Using this method, we more steadily progress up the board to help you achieve your goals.

Before the internet, the dissemination of information was limited, and one could gain an advantage simply through timely or exclusive access to information. Today, we are awash in instant information, so our task becomes paying attention to what matters most to your current and future investments. This is where discipline and a dogmatic adherence to our investment approach works in our favour. We don’t have to know everything, and we don’t try to predict the short term, rather we focus on the big picture and second-order thinking. This is consistent with our investment philosophy and long time horizon.

What does that look like on a day-to-day basis? We read, we talk, we write, we think, we analyze, and we build financial models. We constantly share ideas and challenge our views. We do this to find the most appropriate investments on your behalf. You have likely met most of my colleagues on the investment team. They are intelligent, curious, and diligent people, and while we enjoy a collegial atmosphere, rest assured, there are no Snakes & Ladders…